The blogosphere is alive with Microsoft's patent (link) for pay-as-you-go hardware services. There are a number of patents being filed and awarded and Microsoft has its fair share. What makes this different? I have two thoughts on this event relevance and the innovation process.

Relevance - Microsoft is a software ecosystem company (Cusamano of MIT calls it a platform company - which I feel is a narrow definition). Microsoft has built a formidable partner network that it depends on. So this patent appears to be more of a message to their partners (and the market) that the entire ecosystem needs to be renewed to take part in the software-as-a-service (SaaS) wave. It is interesting, that hardware vendors that are factored into the SaaS equation., as hardware players are often times ignored when discussing the SaaS wave. Could this spark a wave of more cloud-infrastructure providers? and not just the likes of Amazon and Google? Providers who would be enticed to provide SaaS platforms like Azure which was launched earlier this year. I recall Microsoft attempting a pay-as-you-go subscription model for its enterprise software sometime in 2002-2003. The model and the billing engine was in place but not rolled out. I guess CIOs were not quite ready to budget for software as a billed service - it was just too unpredictable. But, maybe now that PUPM ("per user per month") is commonplace, CIOs maybe more willing to discuss this. It will be interesting to see how Green IT, the economic downturn and other events and marketing hype shape this developement.

Innovation process - Microsoft has been a great follower and superb software business operator but not often considered as an innovator. I do not wish to debate what constitutes innovation and what does not, however I believe that innovation in product companies (eg Apple) is different from platform companies (Cisco) and is different from ecosystem companies (Microsoft). And that Microsoft is not doing enough to innovate. However, what is interesting about this patent is that Microsoft filed for patent in June 2007, and would have probably have been working on it for at least a year before that - and must have battled for at least a few months before that to secure funding. So we are talking about an "idea to patent" cycle of 2-3 years. And the hard part is still to come - to make the idea viable and pay off! There are many questions that need to be answered like how to secure intellectual property rights, how to fund open innovation, how to capitalise on investments in research and my favourite - how do we calibrate or overhaul our education system so that we can think and act "glocal".

The next year is going to show us many examples of innovations in the SaaS space. I believe this will drive service-based businesses to greater heights. Programming the web is getting real. And consumer/citizen-centered design will be the dominant way to create services.

Happy new year!

In earlier posts, I talked about Norway as a test-bed for developing services in a digital society (my first public statement on this topic was at the First Tuesday network event in Oslo, May 2006 where I presented contexts for digital services).

In an attempt to understand more about this vision of “citizen-centred design”, I decided to conduct “small experiments" that could serve as demonstrators and learning arenas. Using services in Norway as a departure point was both practical and necessary to create of these demonstrators. And as expected, making the journey from ideation to practice called for floating timelines, simplified definitions and results – basically adjusting to the constraints of reality. (I kept my day-job but stretched my free time to the limit – and honestly nothing would have happened if my wife and sons had not “allowed me” to spends endless hours in the blogosphere).

Anyway, let me summarize these last two years by sharing 3 interesting “demonstrators” that have given me invaluable experience and insight in citizen-centred service design (see origins). Hopefully, creating a better understanding of consumer/citizen-centred design. For the short term, as we move into the eye of the storm of economic downturn, I am convinced that the role of citizen-consumer-centricity is not only a good thing but is critical for businesses to emerge from the storm successfully. The three demonstrators are:

Healthcare insurance for retired teachers – A demonstrator inspired by the concept of social insurance as a basic right for residents of Norway and the undeveloped insurance market in India that had opened up for foreign direct investment. Targeting teaching and non-teaching staff (including retired staff) from my childhood school in Mumbai and leveraging the global network of school alumni as micro-philanthropists this idea demonstrates the benefits for staff (afford basic healthcare that poor salaries / pension would not cover), school (create a caring place to work), alumni (giving back to the institution), insurers (innovation in user-designed insurance products) and society (inspiration that a caring glocal society can work). After two terms of successful fundraising, one can see that the concept has merit. And that there is hard work ahead – to make this repeatable and viral. Also makes the case for a much needed societal digital infrastructure. Others who want to replicate this idea can read more here. See also this link.

Rural electrification – solar-powered computer room - Regions that should have been able exploit solar energy, are unable to do so due to the lack of infrastructure and investment – but even more so due to the lack of knowledge and incentives on making this possible. Watching the efforts of the Norwegian solar energy businesses like REC, led to a small project that provided a school in rural Maharashtra, India with an uninterrupted power supply to power the computer room. The solution is “service-oriented” in that it is delivered as a turnkey project including 1-year of on-site service. The added dimension to “service-orientation” is growing the potential to develop skills of local resources as means of livelihood and hopefully grass-roots innovation. Teaming with Tommy Fernandes of Insite International, a solar energy advisor here in Norway, who also financed the solution; school administrators in Talasari district, a supplier in Rajasthan India and my alumni network in Mumbai this demonstrator aims to provide a concrete solution and to increase knowledge and the potential for more win-win-win-win arrangements. For the investor, a working concept that can help close deals; for the school administrator, increased self-sufficiency and a better understanding of the potential of solar energy; for the supplier, a cost-effective means to reach to smaller markets and for the alumni (opportunity to give back and create business ideas). A HOWTO whitepaper is available if interested.

Learning platforms for hyperlinked education networks – With my technical background it was not long before I was involved in the efforts at my children’s school here in Norway -- in adopting an ICT-based learning platform. That was 5 years ago; the platform (Fronter) links schools in a creative manner allowing for the creation of “horizontal learning networks” and ability to do school work “virtually”. I visualized students and teachers of the 8^th grade of Linderud skole in Oslo collaborating on a school assignment with the 8^th grade of my childhood school in Mumbai! Together with Fronter we are working with two schools in Mumbai in a collaborative pilot as they try out the Fronter learning platform and explore the potential of horizontal learning networks. As my school prepares to celebrate its 150^th anniversary in 2013, I hope we will have created a learning mesh to support collaborative learning. This is very much an on-going project with benefits for teacher (save time and build a community of practice for teachers), school administrators (easier admin and create a creative place to teach), alumni (give back creatively as mentors to students and teachers), parents (participate in the learning experience and follow progress), government (increase the reach to rural areas) – and most importantly for students (a learner-centric experience that prepares him/her for a world of collaborative work).

So, where is Norway as a test-bed? Well, last week 10th Dec, Fronter was sold to the Pearson Group. My first reaction was yanbga "yet-another-Norwegian-business-gone-abroad" -- and initial concern, but Roger Larsen, the energetic and visionary co-founder is a keen supporter of this learning experiment. Fronter has used Norway as a test-bed ever since they started in 1998 – and through a lot of hard work and determination now provide a learning platform for all public schools in the Nordic captial cities and London (about 3000 schools, colleges and univesities). And have become the 2nd largest player in the world in the learning platform market. 10 years on and in a move to take on the huge emerging markets like India, China etc they have teamed up with a learning content provider to increase the “service content”. Companies like Trolltech and FAST were acquired by Nokia and Microsoft respectively, presumably to reach a global market.

However, I am not convinced that selling out is the only way to “go global” – I believe there is a lot to gain in an alliance-based model. This is even more relevant in these days of the cloud. Some pertinent questions: how does one sell and price cloud-based services? how should cloud-based business operate? how should governments support (and tax) cloud-based businesses? As “the cloud” drives the shape and nature of the multi-polar world we must think differently. Businesses and national agencies should think creatively to create incentives to drive business activity “glocally”, knowing that some or all of business will inevitably end up "on the cloud" -- for the global marketplace. A lot of research to conduct and a lot to learn for all of us in this rapidly shrinking world – to be creative to retain the unique in our small societies while still being part of the global society - unity in diversity.

I wish us the best for a reflective, relaxed and fun-filled Christmas break. And for peace and success in our endeavours in 2009!